In February gold has slipped back into a bearish mood now approaching the $1300 price level. $1300 is what I call a psychological price as the media picks up its commentary when this price level is getting close. The other psychological price level is $1200. The gold analysts will go nuts if gold ever approaches $1200 again. The question remains? Is gold in a bigger bullish phase, or was the move from $1160 just a big bear market rally? Since the 2011 peak gold has made many bear market rallies where the majority were fooled into believing the return of the bull market.
I’m keeping my degree levels small at this time as small degree levels get trashed pretty quick, as it’s all about the process of elimination.
I would turn very bullish on gold if gold produced a big impressive spike to the downside, but gold must also display a huge zigzag or even a flat type of a crash. It’s the end of “C” waves that do produce the huge spikes.
It looks like a nice run of 5 is starting so now its just a matter of time if another run of 5 completes. Sounds like playing cards when I talk about a run of 5, and it is. I used to play Big Bertha a lot where we always need to build runs. Even corrective waves come in runs of 5, like W, X, Y, X, Z.
Any drop in the gold price, say from $1300 to $1200 is just, “Childs-play”, as gold can move very violently when it wants to. I also read that January gold runs don’t last all that long and even summers can be pretty boring for gold. When gold makes a run out of fear, “Safe-haven buyers rushing in”, then they can “Rush out” just as fast.
We are close to a 7-year bear market in gold so far, and I think it’s far from over. I’ve counted out 13-year bearish moves in silver several times, but that doesn’t mean it will happen this time.